We hate it too:
We hate the fact that we have to stop new customer sign-ups from time to time to clear out inactive accounts.  

Unlike other hosting companies we do not allow 1,000 sites to sign up on a server that only has a 20 GB Hard-Drive and hope our customers do not use all of the 250 MB for their site and e-mail..

When an account is created and a site is added. We allocated the space needed for that domain regardless if it is used or not. Doing this helps us during the planning of new server clusters.

So what happens?
Sadly many individuals take advantage of our free hosting offer. We get nearly 2,000 new customer sign ups a week. Nearly 500 of them are fraudulent where individuals create hosting spaces for nositename.com, nositename2.com and so on. This sites are not registered or pointing to us. The individuals are simply using it to host 0-Day Appz, Pr0N, and Warez a clear violation of our Terms of Service. Not only are they taking up space away from individuals that would use the service but they are generating unnecessary traffic to us. 

Why do you let it happen?
The steps used to create the account and the site are automated. Since we do not force customer to register or transfer their domains to us we provide a grace period before our system informs us of a possible violation. Many customers will sign up for our service and then update their DNS information or even register their domain through another provider. But, the people who violate the service do not do that. They simply create an account and upload the files and link to those files.

So what happens when sign up is down?
When the sign up is down we manually start removing inactive accounts and re-allocate the empty space. 

Will this cause my site to go down?
No, not at all. What we are doing is only account related. You will not experience any downtime and we wont move your sites to other servers.

How can I help?
Unfortunately their is nothing you can do as a customer. The only way you can assist us in preventing this is if you know the individuals doing it and advise them to stop. 

I keep hearing about a set-up fee?
The 3.00 Hosting plan will never have a set up fee. We have been talking about having a set up fee to discourage people from abusing the service. We do not want to start forcing customers to register their domains or transfer their domains to us just to get the free monthly hosting. Please feel free to e-mail us at info@ihostfree.com and tell us what you think about a 1.00 dollar set up to get the free monthly hosting. You can also join our Forums and talk about it.

The Set up fee will only affect new customers not existing customers. 

I love your service I want to sign up for the 3.00 dollar hosting?
Sign up here for the 3.00 Dollar Hosting